Jack Townsend offers this blog on Federal Tax Crimes principally for tax professionals and tax students. It is not directed to lay readers -- such as persons who are potentially subject to U.S. civil and criminal tax or related consequences. LAY READERS SHOULD READ THE PAGE IN THE RIGHT HAND COLUMN TITLE "INTENDED AUDIENCE FOR BLOG; CAUTIONARY NOTE TO LAY READERS." Thank you.

Wednesday, April 15, 2015

Must Overt Act Within the Applicable Conspiracy Statute of Limitations Be Alleged in the Indictment? (4/15/15)

The general conspiracy statute, 18 USC 371, here, often deployed in tax crimes prosecutions, requires an overt act in furtherance of the conspiracy and at least one overt act must be in furtherance of the conspiracy. What is not settled is whether the indictment must allege at least one such overt act within the applicable statute of limitations period for the conspiracy alleged. All courts agree that the prosecution may prove overt acts not alleged in the indictment in order to meet the requirement that the element of the conspiracy crime is met. The question is whether at least one of the overt acts within the applicable statute of limitations must be alleged in the indictment to avoid dismissal of the indictment. And to drill down further, if the allegation requirement is necessary, what if the prosecution does not prove the overt act alleged but proves another unalleged overt act within the statute of limitations? I don't have the answers to these questions directly, but offer the following from a recent case (United States v. Magalnik, 2015 U.S. Dist. LEXIS 46820 (WD VA 2015)):

The statute of limitations is an affirmative defense that must be raised by a defendant. See Biddinger v. Commissioner of Police of City of New York, 245 U.S. 128, 135, 38 S. Ct. 41, 62 L. Ed. 193 (1917). Once a defendant does so, however, "[t]he government bears the burden of proving that it began its prosecution within the statute of limitations period." United States v. Wilson, 118 F.3d 228, 236 (4th Cir. 1997). It is well-settled that, in order to obtain a § 371 conviction, the government must prove at trial that an overt act in furtherance of the charged conspiracy occurred within the applicable limitations period. Head, 641 F.2d at 177. Disagreement exists, however, as to whether a timely act must be alleged in the indictment itself. Some courts hold that an indictment that fails to allege a timely overt act is subject to dismissal on its face. See United States v. Davis, 533 F.2d 921, 929 (5th Cir. 1976) (error to deny motion to dismiss conspiracy indictment where the indictment failed to allege a overt act within the limitations period, because "for purposes of the statute of limitations the overt acts alleged in the indictment and proved at trial mark the duration of the conspiracy"); United States v. Stoner, 98 F.3d 527, 533 (10th Cir. 1996) ("[A]n indictment must allege that the conduct constituting the conspiracy fell within the statute of limitations, and an indictment that does not contain such allegations is subject to dismissal on its face."). Other courts hold that the government can satisfy the statute of limitations by proving a timely overt act at trial, even where the acts alleged in the indictment are untimely. See United States v. Frank, 156 F.3d 332, 339 (2d Cir. 1998) ("[T]he statute of limitations may be satisfied by proof of an overt act not explicitly listed in the indictment, as long as a defendant has had fair and adequate notice of the charge for which he is being tried, and he is not unduly prejudiced by the asserted variance in the proof."); United States v. Schurr, 794 F.2d 903, 907-908 (3d Cir. 1986) ("[It is well settled that the government can prove overt acts not listed in the indictment, so long as there is no prejudice to the defendants thereby, [and] [t]here would appear to be no reason that the government could not satisfy its requisite showing under the statute of limitations by means of an overt act not listed in the indictment").

See also When Does the Conspiracy End? (Federal Tax Crimes Blog 12/10/13), here.

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